Forex Flash: GBP downside risks increasing - Wells Fargo

Nick Bennenbroek, Head of Currency Strategy at Wells Fargo comments that his outlook for the pound has turned mildly negative, with downside risks increasing.

He comments that the economy returned to contraction in Q4, and confidence surveys remain consistent with only slow positive growth. He writes, “Elevated inflation is keeping the Bank of England on hold, but the Bank of England has indicated it is willing to ease further if needed, while balanced FX positions offer plenty of room for sterling to decline.”